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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Dods Group Plc | LSE:DODS | London | Ordinary Share | GB00BNYKJJ86 | ORD GBP0.28 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 75.00 | 70.00 | 80.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMDODS
RNS Number : 3949R
Dods Group PLC
29 October 2019
29 October 2019
Dods Group plc
("Dods" or "the Group")
UNAUDITED INTERIM RESULTS FOR THE HALF YEARED 30 SEPTEMBER 2019
Dods, a leading technology company specialising in data, code, business intelligence and media, announces its unaudited interim results for the half year ended 30 September 2019. The Group continues to enhance its business credentials as a leading provider of Augmented Intelligence(2) by embedding its services into client workflows, further enabled by the acquisition of Meritgroup Limited ("Merit") on 18 July 2019.
Financial Highlights
Continuing operations
Hot Features
Premium
H1 2020 H1 2019
30 Sept 19 30 Sept
18
Total revenue (GBP) 12.5m 10.7m
Gross margin (%) 34% 42%
Adjusted EBITDA (GBP) (1) 1.4m 1.5m
Adjusted EBIT (GBP) (2) 0.2m 0.9m
(Loss) / profit before tax
(GBP) (0.3m) 0.4m
Adjusted basic EPS (Pence) 0.04p 0.30p
Basic EPS (Pence) (0.08p) 0.11p
Cash at bank (GBP) 6.8m 8.3m
Debt (GBP) 5.0m -
Total assets (GBP) 64.3m 39.5m
1. Adjusted EBITDA is calculated as earnings before interest, tax, depreciation, amortisation of intangible assets, share based payments and non-recurring items.
2. Adjusted EBIT is calculated as operating profit plus non-recurring costs.
Operational Highlights
-- Successful completion of the acquisition of Merit for GBP22.4 million, with associated net assets of GBP2.3 million
-- Integration of Merit proceeding well and realisation of annual synergies of GBP0.5 million on track
-- Commencement of technology upgrade of current business intelligence platform with phase one scheduled for delivery first half of calendar year 2020
-- Delivery of an enterprise resource planning software system due to be completed before year end.
Board Changes in H1 2020
-- As disclosed on 2 September 2019, Dods Group plc received notice of resignation from Nitil Patel, Director and Chief Financial Officer. Nitil has a notice period of 12 months and will facilitate an orderly transition to his successor.
Outlook
The results for the period have been in line with the Board's expectations and following completion of the Merit acquisition, the Group will benefit from an 8-month contribution from Merit in the current financial year. The Group continues to be cash generative and has strengthened and diversified its capabilities.
Due to the uncertainties in the political and economic environment, and with an approaching general election in the UK, the Board remains cautious about the outlook for the second half of the year.
Dr David Hammond, Chairman, commented:
"The Group continues to deliver quality products and services in a challenging environment. The addition of Merit has enabled us to diversify and increase our recurring revenue base. Notwithstanding the current cautious outlook, the Board views the Group's medium to long-term prospects with confidence."
This announcement is released by Dods Group plc and contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 ("MAR"), and is disclosed in accordance with the Group's obligations under Article 17 of MAR.
For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is being made on behalf of the Group by Nitil Patel, Chief Financial Officer.
For further information, please contact:
Dods Group plc
Simon Presswell - CEO 020 7593 5500
Nitil Patel - CFO
www.dodsgroup.com
Liberum (Nomad and Broker)
Neil Patel 020 3100 2000
Cameron Duncan
Louis Davies
Business and operational review
The interim results are in line with expectations and progress continues to be made in building a sustainable growth business with higher annual recurring revenues.
Having completed the acquisition of Merit and substantially concluded the integration on 30 September 2019, Dods is now one step closer to realising our ambition to become a leading Augmented Intelligence(2) business, acting as trusted adviser to prominent brands seeking to navigate an increasingly complex political and economic environment.
Through the period, the operational priorities were:
-- complete the acquisition and integration of Merit;
-- leverage the expertise of Merit's founder as Chief Technology Officer of the enlarged Group;
-- develop and invest in digital products to continue to drive recurring revenue; -- maintain focus on improving the retention of recurring revenues; -- explore opportunities to sell Merit's services to Dods customers and vice versa; -- search, appoint and induct the Chief Revenue Officer and the Chief Information Officer;
-- continue to invest in data management, marketing automation and the Group's sales effectiveness;
-- focus our growth in revenue across our owned events and engagement portfolio.
During the period the Group secured a number of notable contracts including those with Oracle, Fuji Film, Boehringer, GE, Google and the Coca-Cola Corporation and extended a contract with UK Government to provide Civil Service Live to October 2020.
Our Training division continued to win international contracts and deliver various programmes across the globe from the Supreme Court (UK), United Nations, CBI and the Government of India and over 315 (H1 FY2019: 220) training workshops to the UK Government.
Our digital media titles have continued to enjoy strong growth in readership, with page views for PoliticsHome up 104% on the same period to 10.6 million and unique visitors up 63% to 6.7 million.
We continue to expand our points of contact within our customer base, going beyond public affairs and into the Chief Data Science, Information, Technology and Marketing Officer's agenda as we seek to help customers manage risk and find competitive advantage in the regulated markets within which they operate.
We do this by providing data and technology solutions that inform, engage and connect professionals who wish to drive actionable insights for business-critical decisions, not just in political and policy areas, but increasingly across new and existing regulated markets.
Outlook
Whilst it is impossible to predict the extent of the continued political uncertainty and any impact this might have on the second half of the year the Board remains confident in the medium to long-term prospects of the Group.
Simon Presswell
Chief Executive Officer
Financial review
Income statement
The Group's revenue from continuing operations increased by 16.8% to GBP12.5 million (H1 FY2019: GBP10.7 million) and gross profit decreased by 6.7% to GBP4.2 million (H1 FY2019: GBP4.5 million). This reflects the 2.4 months results of the Merit business.
Gross margin decreased from 42% to 34% in the period. The decrease in gross margin is a combination of the change in the product mix following the addition of Merit and the increased venue and delivery costs experienced by Dods in H2 FY2019.
The Group has adopted IFRS16 and therefore reclassified material operating leases (right-of-use-assets) both on the income statement and statement of financial position. Consequently, administration costs decreased by 6.7% to GBP2.8 million (H1 FY2019: GBP3.0 million).
Adjusted EBITDA decreased by 9.3% to GBP1.36 million (H1 FY2019: GBP1.5 million). Operating loss was GBP0.1 million (H1 FY2019: profit of GBP0.4 million), after a right-of-use assets charge of GBP0.5 million (H1 FY2019: GBPnil), an amortisation charge of GBP0.3 million (H1 FY2019: GBP0.2 million) for business combinations and a charge of GBP0.1 million (H1 FY2019: GBP0.3 million) for intangible assets. The depreciation charge in the period remained flat at GBP0.2 million (H1 FY2019: GBP0.2 million). During the period, the Group incurred GBP0.3 million of non-recurring costs (H1 FY2019: GBP0.5 million).
Net finance costs have increased for the period to GBP0.2 million (H1 FY2019: income of GBP4,000) reflecting IFRS16 adoption (charge of GBP0.2 million), borrowing costs following the acquisition of Merit (charge of GBP39,000) and foreign exchange movement during the period (income of GBP61,000).
The taxation charge for the period was GBP37,000 (H1 FY2019: GBPnil) and relates to the Group's Belgian operations. For the overall Group, the tax charge is based on the use of accumulated tax losses.
Adjusted earnings per share, both basic and diluted, from continuing operations in the period were 0.04 pence (H1 FY2019: 0.30 pence) and were based on the adjusted profit for the period of GBP0.2 million (H1 FY2019: GBP1.0 million) with a weighted average number of shares in issue during the period of 431,276,215 (H1 FY2019: 341,774,286).
Earnings per share, both basic and diluted, from continuing operations in the period were a loss of 0.08 pence (H1 FY2019: earnings of 0.11 pence) and were based on the net loss for the period of GBP0.3 million (H1 FY2019: net profit of GBP0.4 million).
The Board is not proposing a dividend (H1 FY2019: GBPnil).
Statement of Financial Position
Assets
As mentioned previously, the Group has adopted IFRS16 and has reclassified operating leases as right-of-use assets and corresponding lease liabilities. Under the modified retrospective approach the Group has not restated prior periods. The impact has been to increase non-current assets by GBP8.6 million (H1 FY2019: GBPnil) and there is an associated increase in finance lease liability of GBP10.0 million (H1 FY2019: GBPnil). This has been shown as GBP1.5 million as current liability and GBP8.5 million as non-current liability.
Other non-current assets consisted of goodwill of GBP28.2 million (H1 FY2019: GBP13.3 million), intangible assets of GBP10.3 million (H1 FY2019: GBP8.0 million) and tangible fixed assets of GBP2.3 million (H1 FY2019: GBP2.2 million). The movements in goodwill, intangible and tangible fixed assets reflect the acquisition of Merit during the period.
The Group holds a 40% stake in the issued share capital of Sans Frontières Associates (SFA) and has loaned SFA GBP0.6 million (H1 FY2019: GBP0.7 million) at the period end. The loan is unsecured and carries no interest charge. Additionally, the Group holds a 30% stake in Social 360 at a cost of GBP0.5 million (H1 FY2019: GBP1.67 million).
Trade and other receivables increased by GBP1.8 million to GBP7.0 million (H1 FY2019: GBP5.2 million), as a result of the Merit acquisition. Included in prepayments is an amount of GBP0.8 million due in cash to certain vendors of Merit. The corresponding amount is in current and non-current liabilities as deferred consideration. The Group had a cash balance of GBP6.8 million (H1 FY2019: GBP8.3 million) and gross borrowings of GBP5 million at the period end (H1 FY2019: GBPnil).
The Group has borrowed a term loan of GBP3 million (H1 FY2019: GBPnil) over a 5-year period carrying a rate of 3.25% over LIBOR. In addition, it has a revolving credit facility (RCF) of GBP2 million carrying a rate of 3.5% over LIBOR. The current amount due is GBP0.3 million and non-current is GBP4.7 million.
Current liabilities increased by GBP2.9 million to GBP12.6 million (H1 FY2019: GBP9.7 million) as a result of the Merit acquisition, the adoption of IFRS16 and the impact of the current component of the bank loan. Deferred tax liability was GBP0.5 million (H1 FY2019: GBP0.8 million). The Group has also recognised a deferred consideration of GBP1.6 million (H1 FY2019: GBPnil) which is payable in both shares and cash over the coming two and three years to certain Merit vendors.
Total assets of the Group were GBP64.3 million (H1 FY2019: GBP39.4 million) with the main movements being an increase in goodwill and intangibles as well as the IFRS 16 adoption. Total equity increased by GBP7.7 million to GBP36.6 million (H1 FY2019: GBP28.9 million), mainly reflecting the issue of shares during the period.
Liquidity and capital resources
The Group has generated cash from operations of GBP0.2 million (H1 FY2019: GBP16,000) during the period. It has received GBP13 million (H1 FY2019: GBPnil) from the issuance of shares, borrowed GBP5 million (H1 FY2019: GBPnil) and paid GBP19.2 million relating to investing activities (H1: FY2019: GBP0.4 million). The cash position at the period end was GBP6.8 million (H1 FY2019: GBP8.3 million).
As at 30 September 2019 the Group had a net cash position of GBP1.8 million.
Nitil Patel
Chief Financial Officer
Condensed consolidated income statement
For the half year ended 30 September 2019
Unaudited Unaudited Audited
Half year Half year Year ended
ended ended 31 Mar 2019
Note 30 Sept 2019 30 Sept GBP'000
GBP'000 2018
GBP'000
----------------------------------------- ------- -------------- ----------- -------------
Revenue 2 12,524 10,702 21,301
Cost of sales (8,326) (6,241) (13,419)
----------------------------------------- ------- -------------- ----------- -------------
Gross profit 4,198 4,461 7,882
Administrative expenses (2,842) (2,958) (6,381)
Adjusted EBITDA 1,356 1,503 1,501
Depreciation of tangible fixed
assets (243) (185) (379)
Depreciation of right-of-use (507) - -
assets
Amortisation of intangible
assets acquired through business
combinations (281) (198) (351)
Amortisation of software intangible
assets (144) (267) (1,789)
Non-recurring items 3
Non-recurring acquisition
costs and
professional fees (70) - (2,239)
Impairment expense - investment
in equity
accounted associate - - (1,231)
Impairment expense - intangible
assets - - (259)
People-related costs (121) (315) (332)
Other non-recurring items (116) (146) (697)
Operating (loss) / profit (126) 392 (5,776)
Net finance costs (177) 4 -
Share of profit / (loss) of
associate - (18) 50
----------------------------------------- ------- -------------- ----------- -------------
(Loss) / profit before tax (303) 378 (5,726)
Income tax (charge) / credit (37) - 197
----------------------------------------- ------- -------------- ----------- -------------
(Loss) / profit for the period (340) 378 (5,529)
----------------------------------------- ------- -------------- ----------- -------------
(Loss) / profit per share (pence)
Basic 4 (0.08p) 0.11p (1.62p) Diluted 4 (0.08p) 0.11p (1.62p) ----------- -------- ------ --------
The following notes form part of these unaudited interim results.
Condensed consolidated statement of comprehensive income
For the half year ended 30 September 2019
Unaudited Unaudited Audited
Half year Half year Year ended
ended ended 31 Mar 2019
30 Sept 2019 30 Sept GBP'000
GBP'000 2018
GBP'000
------------------------------------- -------------- ----------- -------------
(Loss) / profit for the period (340) 378 (5,529)
Items that may be subsequently
reclassified to Profit and loss
Exchange differences on translation
of foreign operations - - (8)
------------------------------------- -------------- ----------- -------------
Other comprehensive (loss) / income
for the period - - (8)
------------------------------------- -------------- ----------- -------------
Total comprehensive (loss) / income
for the period (340) 378 (5,537)
------------------------------------- -------------- ----------- -------------
The following notes form part of these unaudited interim results.
Condensed consolidated statement of financial position
As at 30 September 2019
Unaudited Unaudited Audited
30 Sept 2019 30 Sept 2018 31 Mar 2019
Note GBP'000 GBP'000 GBP'000
------------------------------- ------- -------------- -------------- -------------
Non-current assets
Goodwill 5 28,218 13,282 13,282
Intangible assets 6 10,245 8,035 6,421
Property, plant and equipment 7 2,286 2,209 2,063
Right-of-use asset 10 8,629 - -
Investment in associates 503 1,666 503
Long-term loan receivable 630 700 700
Total non-current assets 50,511 25,892 22,969
Current assets
Inventories 35 34 16
Trade and other receivables 7,010 5,169 3,584
Cash and cash equivalents 6,787 7,062 7,160
Restricted cash held in
deposit account - 1,266 1,266
Total current assets 13,832 13,531 12,026
Total assets 64,343 39,424 34,995 ------------------------------- ------- -------------- -------------- ------------- Capital and reserves Issued capital 19,239 17,096 17,096 Share premium 20,082 8,142 8,142 Other reserves 409 409 409 Retained (loss) / profit (3,148) 3,291 (2,616) Share option reserve 55 44 55 Translation reserve (67) (59) (67) Total equity 36,570 28,923 23,019 Current liabilities Trade and other payables 9,381 9,738 11,489 Deferred consideration 9 1,318 - - Bank loan 353 - - Lease liability 10 1,524 - - Total current liabilities 12,576 9,738 11,489 Non-current liabilities Deferred tax liability 487 763 487 Deferred consideration 9 1,590 - - Bank loan 4,647 - - Lease liability 10 8,473 - - ------------------------------- ------- -------------- -------------- ------------- Total non-current liabilities 15,197 763 487 Total equity and liabilities 64,343 39,424 34,995 ------------------------------- ------- -------------- -------------- -------------
The following notes form part of these unaudited interim results.
Condensed consolidated statement of changes in equity
For the half year ended 30 September 2019
Total
Share Retained Translation Share shareholders'
Share premium Merger earnings reserve(3) option funds
capital reserve(1) reserve(2) GBP'000 GBP'000 reserve(4) GBP'000
GBP'000 GBP'000 GBP'000 GBP'000
--------------- ------------ ------------- ------------ ----------- ------------- ------------- ---------------
Unaudited
At 1 April
2018 17,096 8,142 409 2,913 (59) 44 28,545
Total
comprehensive
income
Profit
for the
period - - - 378 - - 378
At 30
September
2018 17,096 8,142 409 3,291 (59) 44 28,923
Unaudited
At 1 April
2019 17,096 8,142 409 (2,616) (67) 55 23,019
Effect of
adoption of
IFRS 16
Leases - - - (192) - - (192)
--------------- ------------ ------------- ------------ ----------- ------------- ------------- ---------------
At 1 April
2019
(adjusted) 17,096 8,142 409 (2,808) (67) 55 22,827
Total
comprehensive
income
Loss for
the
period - - - (340) - - (340)
Transactions
with owners
Issue of
ordinary
shares 2,143 11,940 - - - - 14,083
--------------- ------------ ------------- ------------ ----------- ------------- ------------- ---------------
At 30
September
2019 19,239 20,082 409 (3,148) (67) 55 36,570
--------------- ------------ ------------- ------------ ----------- ------------- ------------- ---------------
1 The share premium reserve represents the amount paid to the Company by shareholders above the nominal value of shares issued.
2 The merger reserve represents accounting treatment in relation to historical business combinations.
3 The translation reserve comprises foreign currency translation differences arising from the translation of financial statements of the Group's foreign entities into sterling.
4 The share option reserve represents the cumulative expense recognised in relation to equity-settled share-based payments.
The following notes form part of these unaudited interim results.
Condensed consolidated statement of cash flows
For the half year ended 30 September Unaudited Unaudited Audited
2019 Half year Half year Year ended
ended ended 31 Mar 2019
30 Sept 30 Sept GBP'000
2019 2018
GBP'000 GBP'000
----------------------------------------- ----------- ----------- -------------
Cash flows from operating activities
(Loss) / profit for the period (340) 378 (5,529)
Depreciation of property, plant
and equipment 243 185 379
Depreciation of right-of-use 507 - -
assets
Amortisation of intangible assets
acquired through business combinations 281 198 351
Amortisation of other intangible
assets 144 267 1,789
Impairment charges - - 1,490
Share-based payments charge - 1 11
Share of profit of associate - - (50)
Lease interest expense 200 - -
Non-recurring acquisition costs
and professional fees 1,670 - 400
Income tax charge / (credit) 37 - (197)
Operating cash flows before
movement in working capital 2,742 1,029 (1,356)
Change in inventories (18) (22) (4)
Change in trade and other receivables (1,363) (1,497) (114)
Change in trade and other payables (1,060) 506 2,337
Cash generated by operations 301 16 863
Taxation paid (85) - (166)
------------------------------------------ ----------- ----------- -------------
Net cash from operating activities 216 16 697
------------------------------------------ ----------- ----------- -------------
Cash flows from investing activities
Interest and similar income
received - - 12
Non-recurring acquisition costs
and professional fees (1,670) (185) (400)
Additions to property, plant
and equipment (45) (68) (115)
Additions to intangible assets (161) (191) (512)
WIP on software not yet capitalised (300) - -
Investment in subsidiaries (net (17,055) - -
of cash acquired)
Bank loan 5,000 - -
Repayment of long-term loan 70 - -
by associate
----------------------------------------- ----------- ----------- -------------
Net cash used in investing activities (14,161) (444) (1,015)
------------------------------------------ ----------- ----------- -------------
Cash flows from financing activities
Proceeds from issue of share 13,037 - -
capital
Interest and similar expenses
paid - - (12)
Payment of lease liabilities (731) - -
----------------------------------------- ----------- ----------- -------------
Net cash from / (used in) financing
activities 12,306 - (12)
------------------------------------------ ----------- ----------- -------------
Net decrease in cash and cash
equivalents (1,639) (428) (330)
Opening cash and cash equivalents 8,426 8,757 8,757
Effect of exchange rate fluctuations
on cash held - (1) (1)
------------------------------------------ ----------- ----------- -------------
Closing cash at bank 6,787 8,328 8,426
------------------------------------------ ----------- ----------- -------------
Comprised of: Cash and cash equivalents 6,787 7,062 7,160 Restricted cash held in deposit account - 1,266 1,266 Closing cash at bank 6,787 8,328 8,426 ------------------------------------------ ----------- ----------- -------------
The following notes form part of these unaudited interim results.
Notes to the condensed consolidated financial statements
For the half year ended 30 September 2019
1. Basis of preparation
Dods Group plc is a Company incorporated in England and Wales.
This condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU. The annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU. As required by AIM Rules, the condensed set of financial statements has been prepared, and applying accounting policies and presentation that were applied in the preparation of the Group's published consolidated financial statements for the year ended 31 March 2019, with the exception of IFRS 16 Leases, which was adopted on 1 April 2019.
The comparative figures for the year ended 31 March 2019 have been extracted from the Group's statutory accounts for that financial period. Those accounts have been reported on by the company's auditor and delivered to the registrar of companies. The report of the auditor was (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.
The taxation charge for the six months ended 30 September 2019 is based on the utilisation of accumulated tax losses.
The condensed set of interim financial statements have been prepared on a going concern basis and were approved by the Board on 28 October 2019.
2. Segmental information
Business segments
The Group considers that it has one operating business segment, being the provision of key information and insights into the political, public policy and other regulated environments around the UK and European Union. This is the basis on which operating results are reviewed and resources allocated by the senior management team.
No client accounted for more than 10 percent of total revenue.
Geographical segments
The following table provides an analysis of the Group's segment revenue by geographical market. Segment revenue is based on the geographical location of customers.
Unaudited Unaudited Audited
Half year Half year Year ended
ended ended 31 Mar 2019
30 Sept 2019 30 Sept GBP'000
GBP'000 2018
GBP'000
--------------- -------------- ----------- -------------
UK 10,244 8,753 16,183
Rest of world 2,280 1,949 5,118
12,524 10,702 21,301
--------------- -------------- ----------- -------------
Asset segment information has not been disclosed because this information is not reviewed by the senior management team for the purpose of allocating resources.
3. Non-recurring items
Unaudited Unaudited Audited
Half year Half year Year ended
ended ended 31 Mar 2019
30 Sept 2019 30 Sept 2018 GBP'000
GBP'000 GBP'000
--------------------------------- -------------- -------------- -------------
Non-recurring acquisition costs
and professional fees 70 - 2,239
Impairment expense - investment
in equity accounted associate - - 1,231
Impairment expense - intangible
assets - - 259
People-related costs 121 315 332
Other
- Branding and marketing - - 206
- Costs relating to ongoing
strategic corporate
review and initiatives - - 244
- Professional services 63 - 129
- Consultancy 15 - 82
- Other 38 146 36
307 461 4,758
--------------------------------- -------------- -------------- -------------
4. Earnings per share
Unaudited Unaudited Audited
Half year Half year Year ended
ended ended 31 Mar 2019
30 Sept 2019 30 Sept 2018 GBP'000
GBP'000 GBP'000
-------------------------------------- -------------- -------------- -------------
(Loss) / profit attributable
to shareholders (340) 378 (5,529)
Add: non-recurring items 307 461 4,758
Add: amortisation of intangible
assets acquired through business
combinations 281 198 351
Add: net exchange (gains) /
losses (61) (4) 12
Add: share-based payment expense - - 11
-------------------------------------- -------------- -------------- -------------
Adjusted post-tax profit /
(loss) attributable to shareholders 187 1,033 (397)
-------------------------------------- -------------- -------------- -------------
Unaudited Unaudited Audited
Half year ended Half year Year ended
30 Sept 2019 ended 31 Mar 2019
Ordinary shares 30 Sept 2018 Ordinary
Ordinary shares
shares
------------------------------ ----------------- -------------- -------------
Weighted average number of
shares
In issue during the period
- basic 429,464,215 341,524,286 341,640,953
Adjustment for share options 1,812,000 250,000 1,067,375
In issue during the period
- diluted 431,276,215 341,774,286 342,708,328
------------------------------ ----------------- -------------- -------------
Unaudited Unaudited Audited
Half year ended Half year Year ended
30 Sept 2019 ended 31 Mar 2019
Pence per share 30 Sept 2018 Pence per
Pence per share
share
--------------------------------- ----------------- -------------- -------------
Earnings per share - continuing
operations
Basic (0.08) 0.11 (1.62)
Diluted (0.08) 0.11 (1.62)
Adjusted earnings per share
- continuing operations
Basic 0.04 0.30 (0.12)
Diluted 0.04 0.30 (0.12)
--------------------------------- ----------------- -------------- -------------
5. Goodwill
Unaudited Unaudited Audited
Half year Half year Year ended
ended ended 31 Mar 2019
30 Sept 2019 30 Sept 2018 GBP'000
GBP'000 GBP'000
--------------------------- -------------- -------------- -------------
Cost and net book value
Opening balance 13,282 13,282 13,282
Acquisition of subsidiary 14,936 - -
Closing balance 28,218 13,282 13,282
--------------------------- -------------- -------------- -------------
6. Intangible assets
Assets acquired through
business combinations Software Total
GBP'000 GBP'000 GBP'000
--------------------------- -------------------------- ----------- ---------
Cost
At 1 April 2018 24,215 2,907 27,122
Additions - internally
generated - 512 512
Impairment (259) - (259)
At 31 March 2019 23,956 3,419 27,375
Additions - internally
generated - 161 161
Acquisition of subsidiary 4,086 - 4,086
At 30 September 2019 28,042 3,580 31,622
--------------------------- -------------------------- ----------- ---------
Accumulated amortisation
At 1 April 2018 17,359 1,455 18,814
Charge for the year 351 1,789 2,140
At 31 March 2019 17,710 3,244 20,954
Charge for the period 280 143 423
At 30 September 2019 17,990 3,387 21,377
-------------------------- ------- ------ -------
Net book value
At 31 March 2018 - audited 6,856 1,452 8,308
At 31 March 2019 - audited 6,246 175 6,421
At 30 September 2019
- unaudited 10,052 193 10,245
------------------------------- -------- -------- --------
7. Property, plant and equipment
Equipment
and Fixtures
Leasehold Improvements and Fittings Total
GBP'000 GBP'000 GBP'000
--------------------------- ------------------------- -------------- --------
Cost
At 1 April 2018 1,944 1,072 3,016
Additions 66 49 115
At 31 March 2019 2,010 1,121 3,131
Additions 4 41 45
Acquisition of subsidiary - 421 421
At 30 September 2019 2,014 1,583 3,597
---------------------------- ------------------------- -------------- --------
Accumulated depreciation
At 1 April 2018 279 410 689
Charge for the year 201 178 379
At 31 March 2019 480 588 1,068
Charge for the period 100 143 243
At 30 September 2019 580 731 1,311
--------------------------- ------ ------ --------
Net book value
At 31 March 2018 - audited 1,665 662 2,327
At 31 March 2019 - audited 1,530 533 2,063
At 30 September 2019
- unaudited 1,434 852 2,286
------------------------------- -------- ------ --------
8. Interest-bearing loans and borrowings
During the period, the Group borrowed a term loan of GBP3 million (H1 FY2019: GBPnil) over a 5-year period carrying a rate of 3.25% over LIBOR. In addition, it has a revolving credit facility (RCF) of GBP2 million carrying a rate of 3.5% over LIBOR.
9. Acquisition of subsidiaries
During the current period, on 18 July 2019, the parent entity acquired 100 percent of the issued share capital of Meritgroup Limited and its subsidiaries, a provider of data services and software code. The acquisition will enable the Group to further diversify and strengthen its presence in new end markets and open up significant opportunities through the sharing of resources and talent across the Group.
There were no acquisitions in the half year ending 30 September 2018.
Details of the purchase consideration, the net assets acquired and goodwill are as follows:
Unaudited
Half year
Purchase consideration ended
30 Sept
2019
GBP'000
-------------------------- -----------
Cash paid 18,231
Ordinary shares issued 1,046
Deferred consideration 2,091
Purchase consideration 21,368
--------------------------- -----------
The fair value of the 13,715,881 shares issued as part of the consideration was based on the average of the middle market quotations for Purchaser Ordinary Shares on AIM for each of the five dealing days prior to the completion date. The deferred consideration is not contingent on any future event occurring and requires the Group to issue a variable number of shares to the value of GBP1.045m on the first anniversary of the acquisition and GBP1.045m on the second anniversary of the acquisition.
Unaudited
Deferred consideration Current Non-current Total
GBP'000 GBP'000 GBP'000
------------------------------ ---------- -------------- ----------
Deferred consideration to be
settled in shares 1,046 1,045 2,091
Contingent consideration to
be settled in cash 272 545 817
1,318 1,590 2,908
------------------------------ ---------- -------------- ----------
Unaudited
Half year
Net assets acquired ended
30 Sept
2019
GBP'000
---------------------------------- -----------
Cash and cash equivalents 1,176
Trade and other receivables 2,336
Property, plant and equipment 421
Right-of-use assets 4,209
Identifiable intangible assets 4,086
Trade and other payables (1,587)
Lease liabilities (4,209)
Net identifiable assets acquired 6,432
Add: goodwill 14,936
Net assets acquired 21,368
----------------------------------- -----------
The goodwill arising from the acquisition consists of largely intangible assets that cannot be separately recognised, such as the assembled workforce of the acquired entity and cost synergies expected to flow to the Group. The goodwill is not expected to be deductible for income tax purposes.
9. Acquisition of subsidiaries - continued
Unaudited
Half year
Net cash outflow arising on acquisition ended
30 Sept
2019
GBP'000
------------------------------------------- -----------
Cash paid 18,231
Less: cash and cash equivalent balances
acquired (1,176)
Net cash outflow 17,055
-------------------------------------------- -----------
10. Leases
The Group has adopted IFRS 16 Leases as at 1 April 2019, which replaces IAS 17 Leases. The Group has elected to apply the modified retrospective approach, with the cumulative effect of adopting IFRS 16 being recognised as an opening balance adjustment to retained earnings as at 1 April 2019. Prior periods have not been restated.
On transition to IFRS 16 on 1 April 2019, the Group recognised a GBP4.9m right-of-use asset, along with a corresponding lease liability of GBP6.2m. Accrued rent has been adjusted by GBP1.1m and the difference of GBP0.2m against opening retained earnings. The incremental borrowing rate used by the Group in applying IFRS 16 is 5 percent.
A reconciliation of total operating lease commitments disclosed at 31 March 2019 to the lease liability amount recognised on adoption of IFRS 16 is as follows:
Unaudited
GBP'000
--------------------------------------------- ----------
Total operating lease commitments disclosed
at 31 March 2019 7,546
Discounted using incremental borrowing
rate (1,359)
Total lease liabilities recognised under
IFRS 16 at 1 April 2019 6,187
---------------------------------------------- ----------
Unaudited Unaudited
Right-of-use Lease liabilities
assets GBP'000
GBP'000
--------------------------------------------- -------------- -------------------
On adoption - 1 April 2019 4,927 (6,187)
Additions through acquisition of subsidiary 4,209 (4,209)
Depreciation (507) -
Lease interest - (200)
Lease payments - 731
Decrease in accruals/prepayments - (132)
30 September 2019 8,629 (9,997)
---------------------------------------------- -------------- -------------------
The right-of-use assets relate to office space.
11. Related party transactions
During the period, Artefact Partners LLP provided strategic consultancy services to Dods Group plc to the value of GBP20,000. Current non-executive director Richard Boon is an LLP designated member of Artefact Partners LLP.
During the period, the Group received a repayment of GBP70,000 on its interest free loan to its associate Sans Frontieres Associates (SFA). At 30 September 2019 the balance of this loan was GBP630,000.
During the period, an amount of GBP24,650 was payable to an associate, Social 360 Limited, in relation to profit-share for monitoring services provided. At 30 September 2019, GBP24,650 was outstanding.
On acquisition of Merit, an arm's length non-repairing 7-year lease was entered into between a Merit subsidiary (Letrim Intelligence Services Private Limited) and Merit Software Services Private Limited. Cornelius Conlon, CTO of the Group, is the beneficial owner of Merit Software Services Private Limited. The lease relates to the Chennai office of Merit. During the period, payments of GBP158,000 were made to Merit Software Systems Private Limited in relation to the lease.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
IR MPBBTMBTTTFL
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October 29, 2019 03:00 ET (07:00 GMT)
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